Commercial energy efficiency retrofits in the Greater Philadelphia region could spur $618 million in local spending, support 23,500 jobs

http://gpichub.org/hublog/commercial-energy-efficiency-retrofits-in-region-could-spur-618-million-in-local-spending-support-23-500-jobs
A report released on November 6, 2011 estimates that nearly half of the commercial buildings in the Greater Philadelphia region are good candidates for energy efficiency retrofits, and that undertaking these retrofits could spur $618 million in local spending and support 23,500 jobs. Another report details the policies and programs already undertaken in the region to encourage retrofits, and outlines additional proven steps that could help the region take advantage of this economic opportunity.

“These reports provide ample evidence that the Philadelphia region is well-situated to take advantage of the economic opportunities inherent in energy efficiency retrofits. Removing barriers and employing new policy tools to spur retrofits will not only save energy, but also grow jobs and stimulate the regional economy” said Dr. Mark Alan Hughes of the University of Pennsylvania, and leader of the Policy, Markets and Behavior task team for the Greater Philadelphia Innovation Cluster (GPIC) for Energy-Efficient Buildings, which commissioned the reports.

GPIC is a consortium of 24 institutions funded by $129 million in U.S. Department of Energy and other federal funds to create an Energy Innovation Hub at The Navy Yard. GPIC’s goals are to transform the building retrofit industry toward an integrated systems approach, to improve design tools, building systems, public policies, market incentives, and workforce skills needed to achieve a 50 percent reduction of energy use in buildings, and to stimulate private investment and quality job creation in Greater Philadelphia and beyond.

“The Market for Commercial Property Energy Retrofits in the Philadelphia Region”, conducted by Econsult Corporation, identifies 47 percent of the commercial and flex-industrial space between 20,000 and 100,000 square feet in the Philadelphia area for which data is available as potential candidates for energy retrofits. The eligible space includes 4,201 buildings with 154m square feet of space. The report compiled information on commercial building age, type, enclosure, materials, energy load, and owner concentration in the region.

The second report, authored by Cozen O’Connor staff, is entitled “Policy and Process Factors Impacting Commercial Building Energy Efficiency in Pennsylvania and New Jersey.”. The factors examined include laws, regulations, financial incentives, contracts, public bidding requirements and more. The study concluded that while Pennsylvania and New Jersey have enacted many of the available policy levers that could help encourage energy efficiency retrofits, there are still numerous direct and indirect barriers in place.

Additionally, the study found that processes necessary for full valuation of energy efficiency improvements are immature, causing increased transaction costs and making investments less valuable.
...
The typical Philadelphia commercial property spends $2.84/ft per foot per year on energy costs. By contrast, the average U.S. commercial property spends $2.21 per foot per year. Thus, Philadelphia’s energy expenditures are 29% above than the national average, and the fourth highest among 14 large cities studied as shown in the table below.

To narrow the universe to identify the "lowest hanging fruit," the study filtered properties by their end use, construction materials, and shape. The optimal candidate for energy improvements would be an older, low-rise brick building.

Not all buildings consume energy equally. Flex-industrial buildings, including warehouses, account for about 53 percent of the structures studied. But they consume about half the energy per square foot as the average commercial building, such as an office.

The study identified 2,047 buildings as retail, hospitality, or health-care businesses, which consume more energy, according to federal statistics cited by Econsult.

The authors said that lower-rise buildings - with fewer than six floors - are more cost-effective candidates for improvements.  Using data and findings from Emmerich, et al that suggest primary energy savings (HVAC) from reducing air infiltration averages 20-30% is only cost-effective for low-to-mid-rise buildings of five stories or less, the authors determined that buildings five stories or below in height are likely candidates for envelope or enclosure improvements, irrespective of age.

Buildings that depend on electric lighting rather than daylight for interior illumination are good candidates for improvements.  According to the Energy Star building manual (2006), electric lighting accounts for upwards of 35% of electricity use in commercial buildings.  If more than 50% of a building’s floor area is not daylit, then the building must necessarily utilize an above-average amount of synthetic lighting as a necessary substitute, and hence it is likely to cost-effectively benefit from an energy load retrofit.

Masonry buildings are likelier to have more exterior gaps and benefit from improvements rather than steel-and-glass buildings.

The authors narrowed the focus to those buildings owned by the 25 largest commercial landlords for the "purely practical" reason that it will be easier for GPIC to deal with a few owners of multiple properties if its goal is to maximize its impact.

It whittled the prime list down to 232 larger buildings totaling about 50 million square feet, mostly in the commercial corridors of inner-ring suburbs such as Pennsauken, Valley Forge, Plymouth Meeting, Malvern, and Mount Laurel. The buildings were also concentrated in industrial corridors in Thorofare, Bridgeport, Hamilton, Bristol, Northeast Philadelphia near Philadelphia International Airport, and at the Navy Yard.

The reports and supporting materials can be found at https://gpichub.org/activities/policy/gpic-reports.

Greater Philadelphia Innovation Cluster (GPIC) http://gpichub.org 

November 6, 2011

Valuing pollination services to agriculture

http://www.sciencedirect.com/science/article/pii/S092180091100334X
Abstract: Crop pollination by animal pollinators is an important ecosystem service for which there is no generally accepted valuation method. Here, we show that two existing valuation methods, previously thought to be unrelated, are each a special case of a more general equation. We then present a new method, termed attributable net income, for valuing insect pollination of crops. The attributable net income method improves upon previous methods in three ways: (1) it subtracts the cost of inputs to crop production from the value of pollination, thereby not attributing the value of these inputs to pollinators; (2) it values only the pollination that would be utilized by the crop plant for fruit production, thereby not valuing pollen deposited in excess of the plants’ requirements; and (3) it can attribute value separately to different pollinator taxa, for example to native vs. managed pollinators. We demonstrate all three methods using a data set on watermelon pollination by native bees and honey bees in New Jersey and Pennsylvania, USA. We discuss the reasons why different methods produce disparate values, and why the attributable net income method most accurately reflects the actual ecosystem service that is being valued, marketable fruit production.

Highlights
► Multiple methods are currently used to value pollination services, with divergent results.
► We show that these methods are special cases of the same general equation.
► We introduce a new valuation method, which improves on previous methods.
► All methods are demonstrated using the same data set on pollination services to watermelon.
► The reasons why the different methods produce divergent results are discussed.
...
A replacement value for native bee pollination is what it would cost farmers to rent enough honey bees to replace the pollination currently provided by native bees. We calculated this value by multiplying the area in watermelon production (746 ha)2 by the industry-wide recommended honey bee stocking rate (4.5 hives ha-1; Delaplane and Mayer, 2000) by the annual rental cost of a honey bee hive in the study area ($60-$75 hive-1)7 by the fraction of farms at which native bees alone are fully pollinating the crop (91%). We used the same method to estimate the replacement value of honey bee pollination, substituting the fraction of farms fully pollinated by honey bees (78%) for the fraction fully pollinated by native bees (91%).
...
The value of native bee pollination based on the replacement value of renting enough honey bee hives to replace native bees is $0.21 million year-1 (range, $0.20 - $0.21 million year-1) and the replacement value of honey bee pollination is $0.18 million year-1 (range, $0.17 - $0.18 million year-1).
 ...
The production value method provides a higher estimate. The estimated annual production value of watermelon in New Jersey and Pennsylvania combined (P⋅Y), before subtracting the costs of inputs to production, is $7.64 million year-1. Multiplying this production value by the 62%±5% (SE) of all pollen deposition done by native bees provides an annual value of $4.74±0.38 (SE) million for the pollination service provided by native bees. For honey bees, the corresponding value is $2.90±0.38 (SE) million year-1.... After subtracting the costs of variable inputs to production, the estimated annual net income value (Eq. (4)) of watermelon in New Jersey and Pennsylvania combined is $3.63 million year-1, leading to estimates of $2.25 0.18 (SE) million for the pollination services provided by native bees and $1.38 0.18 (SE) million year-1 for honey bees
...
The annual attributable net income value of native bee pollination, when native bees are considered primary pollinators (Eq. (5)), is $3.40±0.16 (SE) million year-1. The value of honey bee pollination, when honey bee pollination is valued residually (Eq. (6)), is $0.24± 0.16 (SE) million year-1 (Fig. B.2). When honey bee pollination is valued as primary (Eq. (5)), its value is $3.07±0.25 (SE) million year-1. When native bee pollination is valued residually (Eq. (6)), its value is $0.56±0.25 (SE) million year-1
...
The cost of renting a single honey bee colony for almond pollination increased from $35 in the early 1990s to $150 in 2007.
...
A free version of the paper  is currently available at http://winfreelab.rutgers.edu/documents/WinfreeGross2011_EcologicalEconomics.pdf.

by Rachael Winfree 1, Brian J. Gross 2 and Claire Kremen 3
1. Department of Entomology, 93 Lipman Dr., Rutgers University, New Brunswick, NJ 08901, USA; Tel.: + 1 848 732 8315.
2. Food and Resource Economics, University of British Columbia, Vancouver, Canada, BC V6T1Z4
3. Department of Environmental Science, Policy and Management, University of California, Berkeley, Berkeley, CA 94720, USA Ecological Economics via Elsevier Science Direct www.ScienceDirect.com
Volume 71; 15 November 2011; Pages 80-88
Keywords: Apis mellifera; biodiversity-ecosystem function; ecosystem services; native bee; pollinator; valuation; ecosystem service valuation; wild bee

Despite Fears of a Crash, Solar Sector Remains White Hot in New Jersey - State fields 700 installation applications a month, even as solar certificates lose half their value

http://www.njspotlight.com/stories/11/1103/0223/ 
New Jersey's solar market is continuing its rapid pace of growth—even amid warnings by some the sector could be headed for a crash.

In October, more than 44 megawatts of new solar systems were installed in the state, bringing the total to more than 447 megawatts of installed capacity, according to information compiled by a state contractor who helps administer the solar program. That amount could be more than doubled (1,017 megawatts) if all of the projects in the pipeline are built.

In fact, so much solar is being built that New Jersey is more than a year ahead of meeting a state-mandated requirement that specifies how much of the its electricity comes from solar energy. For most, that would be viewed as good news, but some say the explosive growth has created an oversupply of solar renewable energy certificates (SRECs), the primary means of financing solar projects.

The result has been prices for the certificates have dropped by more than half since this past June, creating widespread uncertainty among investors as to whether to pump new money into building additional systems in New Jersey. It also has led the state and industry executives to begin looking for ways to stabilize the sector.
...
While industry executives are pushing to extend the utility-run programs, the state Division of Rate Counsel, which represents the interests of ratepayers, remains unconvinced it is the best way to go. "I still want to see why it is beneficial to ratepayers to extend this program," said Paul Flanagan, an attorney with the division.

Under New Jersey's system, power suppliers have to buy a certain amount of their electricity from solar systems. The primary means of meeting that requirement, known as the renewable portfolio standard (RPS), is by purchasing the certificates, which are factored into electricity costs.

Those costs have not been cheap. According to data compiled by Honeywell, a contractor for the state to run the program, the cost to ratepayers is approaching $1 billion, with the current spending at about $872 million. Of that, $267 million was spent in meeting the RPS requirements, $272 million on the utility loan programs, and $342 million through rebates.

With the state incentives, combined with a federal tax cash grant of 30 percent, the solar sector has been so inviting to investors that New Jersey ranks second nationwide in the number of solar installations with more than 11,000, behind only California.
...
By Tom Johnson
NJ Spotlight www.NJSpotlight.com
FOR FULL STORY GO TO:
http://www.njspotlight.com/stories/11/1103/0223/
November 3, 2011

With Post-Its and Checklists, Schools Cut Their Energy Bills

http://www.nytimes.com/2011/08/15/education/15energy.html

Simple yellow Post-it notes with the message “When not in use, turn off the juice,” pointedly left on classroom computers, printers and air-conditioners, have helped the Mount Sinai School District on Long Island save $350,000 annually on utility bills.

Energy consumption in New York City’s 1,245 school buildings is down roughly 11 percent since 2008, as motion detectors have been installed on classroom lights and unused refrigerators and freezers have been unplugged for the summer.

In Yonkers, energy savings have financed $18 million in new boilers, windows and other capital improvements that the Westchester County district could not otherwise afford.

Schools, once known as energy wasters, are embracing conservation in increasing numbers. A desire to practice the environmentally friendly principles discussed in classrooms has been heightened by soaring energy costs and tighter budgets. With the help of a growing industry of energy consultants, school officials are evaluating every detail of their daily operations, like the temperature of the swimming pool and the amount of electricity the cafeteria ovens use, and are replacing energy-guzzling equipment with more efficient models.

Supporters say that even small adjustments can pay off almost immediately. “If we tested schools in efficient use of energy, many of them wouldn’t get a passing grade,” said C. David Myers, president of building efficiency for Johnson Controls, which has joined with 60 of the 125 school districts on Long Island to reduce energy use by 20 to 40 percent annually.

... More than two dozen states ... have used millions in federal stimulus money since 2009 to pay for energy programs and upgrades in school buildings, said Judy Marks, director of the National Clearinghouse for Educational Facilities in Washington. These efforts include replacing light fixtures, adding solar panels and building geothermal heating and cooling systems.

Some states have also started programs to finance school conservation efforts and to create local contracting jobs....  Oregon passed legislation in June to provide school districts with low-interest loans and grants for school efficiency improvements; Washington State started a similar grant-based program in 2009.

In some instances, districts like Mount Sinai have appointed an official energy manager — in its case, Chris Heil, ... to police hallways and classrooms to root out energy waste. Armed with yellow notes, he inspects 100 classrooms a day and “tickets” violators. Teachers have been known to run back to their classrooms when they see him coming. When one instructor refused to shut down his classroom computers at night, Mr. Heil sent him an e-mail calculating how much money was being wasted, and promised to share the next message with the superintendent.... Mr. Heil sometimes shows up at schools at 4 a.m. to make sure the custodial staff remembered to turn off the lights. He has rummaged through storage closets to locate switches to shut down rooftop exhaust fans that ran nonstop. Such vigilance has reduced the district’s utility costs by 30 percent since 2007, Mr. Heil said.

As part of the Bloomberg administration’s campaign to reduce the municipal government’s energy consumption and carbon emissions by 30 percent by 2017, the city awarded $100,000 in May to schools that voluntarily decreased their energy use in a monthlong competition. Martin Luther King Jr. Educational Campus in Manhattan won top honors with a 35 percent reduction. And this fall, rooftop solar panels are being installed on three school buildings.... Dennis M. Walcott, the city’s schools chancellor ... regularly checks on schools that he sees lighted up at night.

Many districts across the country have financed conservation efforts through so-called energy performance contracts with companies that advise them on how to be more energy-efficient and guarantee them specific savings, either in dollars or kilowatts. If the district’s actual savings fall short, the company writes a check to make up the difference.

With contracts involving equipment investments — which can be $50,000 to tens of millions of dollars ... districts typically use existing utility budgets or borrow money through third-party lenders, and then pay it back out of their immediate energy savings so that no budget increase is needed.

In Yonkers, the improvements included replacing Lincoln High School’s 60-year-old boilers, which guzzled 137,500 gallons of heating oil a year.... The new boilers burn only 80,000 gallons.

Three consultants — Johnson Controls, Trane and Energy Education — have reported that their school business has grown by at least a third since 2006. The companies send in engineers and specialists to conduct extensive audits of each district — Energy Education uses a checklist of 1,200 items — and then custom-design conservation programs. “Anything that consumes energy, natural gas or water is going to get evaluated,” said Larry Wash, Trane’s president of global services.

In New Jersey, the schools in Holmdel Township have lowered their electric and gas bills by about half since 2009, to $1 million annually..... That breaks down to 3.5 million fewer kilowatts of power and 240,000 fewer therms of heat a year.

William Balicki, Holmdel’s energy manager, said he kept a tight check on thermostats, and installed automatic timers on outdoor lights in bus yards and parking lots that once stayed on long after the drivers left.
Mr. Balicki also considered placing motion sensors on classroom lights, but instead settled for $75 worth of stickers to post above light switches as a reminder to flip them off.

...
by Winnie Hu
FOR FULL STORY GO TO:
http://www.nytimes.com/2011/08/15/education/15energy.html
The New York Times www.NYTimes.com
August 15, 2011

The Net Cost and Economic Impact of New Jersey’s Offshore Wind Initiative

http://www.beaconhill.org/BHIStudies/NJ-Wind-2011/NJWindReport2011-06.pdf
Executive Summary
On August 19, 2010, New Jersey Governor Chris Christie signed the Offshore Wind Economic Development Act (OWED) into law. The law orders the state Board of Public Utilities (BPU) to develop an offshore wind energy certificate program that would support at least 1,100 megawatts (MWs) of generation from qualified offshore wind projects. The law also provides subsidies to potential offshore wind developers.

The law requires a cost-benefit analysis that includes a detailed analysis of the impact of the projects on state economy and state electricity ratepayers. In this report, the Beacon Hill Institute has conducted the analysis of 1,100 MWs of offshore wind power for New Jersey. The findings are as follows.
* The project would produce a net cost of $3.245 billion to New Jersey, within a range of $2.106 billion and $4.137 billion
* New Jersey’s electricity prices will increase by 2.1 percent, in 2017, within a range of 0.5 percent and 4.2 percent.
* From 2017 to 2036, the average household ratepayer will pay $431 in higher electricity costs; the average commercial ratepayer will pay an extra $3,054 and the average industrial ratepayer an extra $109,335.

These increased energy prices will hurt New Jersey’s households and businesses and will impair the state economy. According to the study by 2017:
* New Jersey will lose an average of 2,219 jobs, within a range of 528 jobs and 4,440 jobs.
* Annual wages will fall by an average of $111 per worker, within a range of $26 per worker and $222 per worker.
* Real disposable income will fall by $330 million, within a range of $79 million and $660 million.
* Net investment will fall by $48 million, within a range of $11 million and $95 million.

The rush to offshore wind power in New Jersey will produce net economic costs, raise electricity costs and dampen economic activity.

by David Tuerck, PhD, Paul Bachman, MSIE and Ryan Murphy, B.S. (PhD candidate)
The Beacon Hill Institute at Suffolk University www.beaconhill.org
8 Ashburton Place Boston, MA 02108; Tel 617-573-8750, Fax 617-994-4279 E-mail: bhi@beaconhill.org
June, 2011

See also State of New Jersey, Legislature, 2010, Offshore Wind Economic Development Act, S2036, 214th Legislature, (June 10, 2010) Sec. 3, (4):22. http://www.njleg.state.nj.us/2010/Bills/S2500/2036_I1.PDF. (accessed April 11, 2011)

In New Jersey’s Solar Panels, Some See an Eyesore on Every Pole - NYTimes.com

http://www.nytimes.com/2011/04/28/science/earth/28solar.html
"Nancy and Eric Olsen ... had a pastoral view of a soccer field and the woods from their 1920s colonial-style house; [now] ... all they [can] see [are] three solar panels." “I hate them,” Mr. Olsen, 40, said of the row of panels attached to electrical poles across the street. “It’s just an eyesore.”
...
Like a massive Christo project but without the advance publicity, installations have been popping up across New Jersey for about a year now, courtesy of New Jersey’s largest utility, the Public Service Electric and Gas Company. Unlike other solar projects tucked away on roofs or in industrial areas, the utility is mounting 200,000 individual panels in neighborhoods throughout its service area, covering nearly three-quarters of the state.

The solar installations, the first and most extensive of their kind in the country, are part of a $515 million investment in solar projects by PSE&G under a state mandate that by 2021 power providers get 23 percent of their electricity from renewable sources. If they were laid out in a solar farm, the 5-by-2.5-foot panels would blanket 170 acres.

New Jersey is second only to California in solar power capacity thanks to financial incentives and a public policy commitment to renewable energy industries....

Some residents consider the overhanging panels “ugly” and “hideous” and worry aloud about the effect on property values.
...
Local officials have forced a temporary halt in many towns as they seek assurances that they will not be liable in case of injury, but also to buy time for suggesting alternative sites — like dumps....
...
PSE&G officials said their search for maximum sun exposure could not dodge and weave residential areas in a place as crowded as New Jersey. It turns out that only a quarter of the company’s 800,000 poles are suitable for the panels, which are mounted 15 feet high and need good southern exposure.
...
PSE&G officials said solar energy was still more expensive to produce than more traditional power sources and acknowledged that bills were going up 29 cents a month. One panel will produce enough kilowatt hours in one year to light four 60-watt bulbs around the clock for around six weeks, the company said.

When complete, the panels on the poles are expected to provide half of the 80 megawatts of electricity generated by the utility's overall $515 million solar investment — enough to power 6,500 homes.
...
April 27, 2011
By MIREYA NAVARRO
The New York Times www.NYTimes.com
FOR FULL STORY GO TO:
http://www.nytimes.com/2011/04/28/science/earth/28solar.html

Solar Farms Put Vacant Land to Work

http://www.nytimes.com/2011/03/23/realestate/commercial/23solar.html

Since the economic downturn, residents and businesses have been looking for ways to use real estate that may no longer appeal to mall developers or home builders. One option is to build solar energy farms, where thousands of solar panels convert the sun’s energy into electricity.

Developers and utilities have a particular incentive to do so in New Jersey, where the state’s Solar Renewable Energy Certificates market, along with federal and sometimes local incentives, has made solar energy more profitable.
...
A few large farms have been proposed and created, including one that opened in October 2009 here at the Livingston Campus of Rutgers. The $10 million, 1.4-megawatt solar installation, with more than 7,000 solar panels on seven acres, is on the smaller side as solar farms go — some in Europe are on hundreds of acres — but the energy it produces is harvested to provide power to all the buildings on campus.

The solar farm meets about 11 percent of the campus’s electrical demand, reducing its carbon dioxide emissions by 1,300 tons a year, according to the university.

But where the farm really starts to pay off is in collecting Solar Renewable Energy Certificates, a type of clean energy credit. Rutgers can then sell the certificates in a market popular with companies that want to avoid penalties levied by the state on generators of polluting energy.

...To date, they’ve offset $235,760 from their electrical usage, but they’ve earned certificates that they can sell for about $1.478 million.

Utility companies have developed some of the larger solar farms in New Jersey. The Public Service Electric and Gas Company is building solar farms in Hamilton, Edison, Linden and Trenton, the largest generating about 4.4 megawatts. These larger sites are often referred to as utility-scale projects.

One of the largest solar farms in the nation, which will produce 20 megawatts on about 100 acres of former farmland in southern New Jersey, has been proposed by Panda Power Funds of Dallas and Con Edison Development, a subsidiary of Consolidated Edison of New York. The farm is under construction in Pilesgrove, N.J., and is expected to be generating power this year.

Several utility-scale solar projects have been held up because they would produce a higher voltage than existing transmission lines can handle, said Lee A. Solomon, the president of the New Jersey Board of Public Utilities. He said he anticipated that situation would be remedied with legislation.
...
One 6.5-megawatt solar farm planned for about 35 acres of a landfill in Stafford Township, N.J., will participate in a New Jersey Board of Public Utilities pilot program that would allow the developer to sell energy produced to 216 apartments
...
Consisting of 24,600 panels, the solar farm will take about two years to complete, with construction starting in early May. In addition to the apartments, the farm will eventually power nine local government buildings that are on the landfill site, an existing Target store and 250,000 square feet of new retail space, Mr. Walters said.

Called Stafford Park, the development already has five apartment buildings, with a total of 112 units, with rooftop solar panels, as well as 410,000 square feet of retail space, with stores like Best Buy, Dick’s Sporting Goods and PetSmart, all of which are partly powered by rooftop solar.

By building the solar farm on a landfill, the Walters Group was able to quell criticism by some environmentalists that solar farms destroy New Jersey’s little remaining open space.

Arnold Zellner of Greener By Design.cautioned that, though the payback on expensive solar installations had become shorter — about three and a half to five years in New Jersey — most solar farms tended to be longer-term investments, using financing that could stretch 10 or 15 years and warranties for up to 25 years.

By Alison Gregor
FOR FULL STORY GO TO: 
http://www.nytimes.com/2011/03/23/realestate/commercial/23solar.html
The New York Times www.NYTimes.com
March 22, 2011